Keeping a Strategy Secret

[Northern boy]

	Quote:	BlowFish
	Lot's of answers not concerning your figures. Beg steal or borrow a small amount ($5k would do) and compound it into however much your heart desires. Stay away from prop. What's the problem?

none. thanks, i'll consider.

[Northern boy]

	Quote:	BlowFish
	"with basically no draw-down other than commiss and slippage." Sounds too good to be true so it probably is (too good to be true).

i've been looking for "it" for awhile now. the people in this forum are intelligent and are helping me tighten the last bolts, which is appreciated. I asked this question to find if there were any terms in contract agreements, anything of the sort, that could be created to protect a trader's method. frankly, i don't care about your nay-saying.

[forsearch]

	Quote:	Northern boy
	maybe i shouldn't of posted the figures, because it seems to be more of a concern than my actual question. feget abou' it

Yeah, run off now that you've got a dose of reality.

Do you really need the stress of managing other peoples money (OPM)?

And yes, the figures matter. Isn't that the reason we all trade? To make money?

Some more than others, to be sure - but we really wouldn't want anyone stealing our edge away from us.

Assuming you can trade this method with size - that is, it scales up nicely - you should have no problem compounding your returns as shown in another post.

Heck, if I were you, I'd save up or even get a line of credit for $5K and start trading that methodology right away.

Prove to yourself that you can make a living and sustain yourself first, then take it to the next level. Until you do so consistently with real money, though, it's all just a pipe dream.

-fs

[Northern boy]

	Quote:	forsearch
	Yeah, run off now that you've got a dose of reality. Do you really need the stress of managing other peoples money (OPM)? And yes, the figures matter. Isn't that the reason we all trade? To make money? Some more than others, to be sure - but we really wouldn't want anyone stealing our edge away from us. Assuming you can trade this method with size - that is, it scales up nicely - you should have no problem compounding your returns as shown in another post. Heck, if I were you, I'd save up or even get a line of credit for $5K and start trading that methodology right away. Prove to yourself that you can make a living and sustain yourself first, then take it to the next level. Until you do so consistently with real money, though, it's all just a pipe dream. -fs

k we'll see

[BlowFish]

	Quote:	Northern boy
	i've been looking for "it" for awhile now. the people in this forum are intelligent and are helping me tighten the last bolts, which is appreciated. I asked this question to find if there were any terms in contract agreements, anything of the sort, that could be created to protect a trader's method. frankly, i don't care about your nay-saying.

I am not nay saying (well I guess i am) it is just friendly advice. Just trying to make sure you aren't going to make expensive mistakes. It is pretty much impossible to avoid draw downs completely (unless you can make 100% winning trades) even with a system that produces 80% winners strings of losers will occur.

I wonder what you are basing your results on? Backtesting? Papertrading? In what sort of market conditions? Bull & bear, different volatility?To be perfectly honest your expectations don't seem realistic. That's not criticism its just watching out for someone who has yet to have there first market lesson. Frankly draw downs are inevitable (though of course you might expect to finish the day/week/month up). I really hope you have done adequate research and testig and even then be prepared for things to be different when doing it for real. The first few curve balls can do more damage to your trading psyche than your account.

[Northern boy]

i've been in the market for 4 years now, i've gotten my lights knocked out before. i know how things work... but your concern is appreciated, Blowfish.

the firm i'm joining (I've decided to do this prop, not on an individual account...execution speed, commish costs, BP the pros beat my cons there) sounds great, i like the manager, they offered me a really good deal, and they sound ethical. I don't want to be a jerk and not let them in on it if they so want, I just don't want it to get outside the firm and become null.

but but but.... I'd still like to know if there are ways to create terms in a contract to protect a traders' methode/strategy. Does anyone have any ideas about this? Thank you.

[Hlm]

Getting back on topic with your question...

The best thing to do is to talk to a lawyer. I am sure you can get something written for good looks. However, when dealing with ideas (not software) based around market strategies there is very little you can do realistically to protect them. The best you can hope for is that you truly have a unique edge that will be beneficial to the firm to keep it in house (i.e. them making money with it). Other than that, in my opinion you are out of luck. This is a cut throat business and it is very difficult to prove the unlawful spread of unique ideas. The only way to keep something truly secret is to not tell anyone. Also, there is a chance that the prop firm will refuse to sign such an agreement. But you never know, they might already have experience with these types of agreements. I would casually mention it to them and see their response. I personally have no experience with prop firms so can't really help any further.

[3monkeys]

You need to talk to this guy. He had a plan with other people's money as well.

$OPM$

[LiggerPig]

It's one thing to have a successful strategy, the important part is being able to trade it. Learn to trade it well and only then will you have to worry about others stealing your idea.
One of the easiest ways to protect your method would be to disguise what you are doing. Using extra indicators, external data, etc. which you don't use all adds to the mystique for someone trying to follow your success.
If they ask, just give 'em pages full of charts and tell them to figure it out for themselves, just like you had to
Good luck with your strategy.

[BlowFish]

	Quote:	Northern boy
	i've been in the market for 4 years now, i've gotten my lights knocked out before. i know how things work... but your concern is appreciated, Blowfish. the firm i'm joining (I've decided to do this prop, not on an individual account...execution speed, commish costs, BP the pros beat my cons there) sounds great, i like the manager, they offered me a really good deal, and they sound ethical. I don't want to be a jerk and not let them in on it if they so want, I just don't want it to get outside the firm and become null. but but but.... I'd still like to know if there are ways to create terms in a contract to protect a traders' methode/strategy. Does anyone have any ideas about this? Thank you.

OK thats good to hear. When it comes to trading we have all seen people fall into holes that could have probably been avoided. Hell, we have probablly fallen into then ourselves.

The problem with using a legal mechanism is that you are going to need to expose things in order to protect them. How would you know if someone was infringing anyway? I think you can rule out patents NDA's etc.

That really leaves not disclosing in the first place and endeavouring to hide what you are doing.

If you have been in the market four years and presumably enjoyed some success I can't understand why you would want to go prop? If you could demonstrate the sort of results you are talking about I'd wire 50k right now.

If you go into a prop shop without capital you are going to get a sh*tty deal. (If you go in with capital you are likely to get a sh8tty deal!) You are going to start off way lower on the equity curve (actually negative). You will have desk costs and the shop will take a massive chunk of any winnings. You will have pretty severe limits in place for a good long while too. Only after doing wel for a decent amount of time are you likely to get a fair crack of the whip.

I don't understand why you would want to start so far 'in the hole'. Why start with such a handicap unless you don't have confidence in your system so don't want to risk your own (or loved ones) money?

Just struggling to understand what's going on here.